Global trade used to be hailed with no doubt. But today, the international mood for globalization has to a great extent shifted. The deeply-held views on free trade and open access for all, which are at the heart of the globalization trend of recent decades, have been joined by ever-more insistent drum beats of dissent. From Europe and North America particularly, but from other places as well, there are calls for a rollback, for trade restrictions, for sanctions and barriers. There are those in the West who believe that to protect jobs and industries, it is necessary to replace “globalization” with “de-globalization.”
A common view of China’s central planning is that it has failed; since China grew faster when its reforms replaced planning with markets, the sooner China gets rid of Five Year Plans the better. This view is rather simplistic. Evidence shows that the Five Year Plans have played an important role in China’s progress. It was the fastest way for China to mobilize capital and labor for industrialization. And when China transitioned from a planned to a market economy and the two worked in parallel, it maintained employment, livelihoods, infrastructure and the supply of basic goods, hence a stable foundation for the nascent market economy.
Anil K. Gupta, the Michael Dingman Chair in Strategy, Globalization and Entrepreneurship at University of Maryland’s Smith School of Business, questions the logic behind Haier’s giant leap towards its new platform strategy. What’s at stake for Haier if it doesn’t embark upon this ambitious plan? According to Gupta: Haier now faces a major conundrum. Unless the company can find other growth opportunities fast, it faces years of potentially very slow growth. It is in this context that one can understand why CEO Zhang Ruimin has embarked on this new strategy.
It is a truth universally acknowledged that a Chinese state-owned enterprise (SOE) in possession of industrial assets must be in want of reform. China’s reforms have released many assets into private ownership, but large blocks remain in corporations linked either to the central government or to a local government via chains of corporate ownership. The State Council’s latest guidelines on the reform of state-linked enterprises envisage more private ownership, some mergers, and a greater role for state asset management companies. But would that ensure better corporate governance?
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PBOC’s move to devaluing the RMB didn’t just follow weak exports data, but also IMF requirements for more market-driven exchange rates.
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The government should step in and regulate digital monopolies because at the end of the day, healthy competition benefits all.
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